Mystery Diamond Treatment Dominates GIA Symposium

This was the first symposium since 1991, and it was supposed to be about a wide variety of subjects.

It was, but attention seem focused mainly on one. JCK’s three on-site editors brought back these reports.

hould jewelers start warning customers that the diamond they’re buying could be treated for color, but that there’s no way of knowing for sure? That troubling question nearly upstaged the Gemological Institute of America’s long-awaited Third International Gemological Symposium, held in late June at the bayside San Diego Hyatt Hotel.

Designed as an unparalleled educational event, the four-day gathering featured world-famous speakers addressing a range of topics from 19th-century French jewelry to contemporary ethics. But topic No. 1 among the 1,450 attendees turned out to be the secret new diamond color-improving process announced last March by Lazare Kaplan International (LKI), the big New York diamond company.

General Electric invented the process, and for proprietary reasons GE not only is keeping it under wraps but also has gotten LKI to sign a non-disclosure agreement. The treatment apparently elevates brownish and yellowish diamonds to D through H (colorless to near-colorless) status. LKI claims the process—which it insists isn’t actually a treatment—is permanent, irreversible, and undetectable.

It’s that undetectability that fueled the anxiety in San Diego. LKI thought it had short-circuited the problem by agreeing to laser-inscribe the girdle of each treated stone with the initials GE-POL. (POL stands for Pegasus Overseas Limited, an LKI subsidiary in Belgium that’s marketing the treated diamonds.) But there’s the matter of the secondary market.

It turns out that like all laser inscriptions, GE-POL is easily polished off. Thus, an unscrupulous dealer or cutter can erase the inscribed warning flag and pass the stones off as untreated, high-color diamonds, possibly reaping a sizable profit. And indeed, at a special plenary meeting called by GIA midway through the symposium, it was disclosed that some fully and partially de-inscribed stones may already be in circulation.

GIA’s Gem Trade Lab spotted several such diamonds submitted for grading in June, lab chief Tom Yonelunas told a stunned standing-room-only audience. Lab officials were able to flag these stones only because they had seen the same diamonds a few weeks earlier and had retained detailed descriptive data on each one. (LKI has been sending the treated diamonds to GIA to grade before it releases them to Pegasus to sell.) GIA would not disclose who submitted the de-inscribed stones.

The revelation that such stones are circulating aroused the fear that some jeweler, somewhere, could already be selling a treated diamond without realizing it—and without the consumer knowing. The chance that this could occur will increase as time goes by, especially if, as is widely rumored, the Russians have discovered how to uncolor diamonds using a method similar to GE’s. Several attendees—particularly appraisers—suggested jewelers should immediately begin warning customers they could no longer guarantee that their diamonds are untreated.

“This is the greatest gemological crisis in my 23 years with GIA,” GIA president William Boyajian said at one of the symposium’s sessions. Nevertheless, Boyajian resisted calls for issuing a statement to the press or taking any other immediate step. “We’re going to proceed carefully and systematically so that we don’t do anything to harm the industry,” he said, appealing for calm. He added that he intends “to keep the doors open with GE and LKI” because GIA needs their cooperation. In negotiations with LKI, the firm has agreed not to sell the processed rough, to continue inscribing all the treated polished stones, and to continue sending GIA stones to grade and study.

GIA as diamond policeman. Just two weeks after the symposium ended, GIA announced a new “enforcement policy” regarding the GE diamonds. In a statement issued in Moscow during the World Federation of Diamond Bourses meeting, Boyajian said that when the GIA Gem Trade Lab spots a GE-processed stone with its inscription partly or wholly removed, it will ask the company that submitted it for permission within 48 hours to re-inscribe the stone. If the company refuses, “GIA will be obligated to report this to the appropriate authorities, including the Jewelers Vigilance Committee, and will make public the potential misrepresentation in the marketplace regarding the disclosure of GE-processed diamonds,” Boyajian said.

GIA also will issue an updated lab report on the re-inscribed diamond with the following comment: “GE-POL is present on the girdle. A GIA report was previously issued for this diamond which disclosed that Pegasus Overseas Limited stated that the diamond was processed to improve its appearance by the General Electric Company.”

In other words, GIA will police the situation when it can. This will help, but it leaves unresolved the problem of stones submitted to other labs or sold without reports. Lacking GIA’s database on the processed diamonds, other labs will have no way of identifying what GIA calls the “rogue” stones.

Meanwhile, GIA gemologists, with a perceptible sense of urgency, are searching for markers of the treatment. The Gem Trade Lab’s Yonelunas reported that after examining several hundred treated stones, lab scientists found “unusual features that may eventually help the trade detect them,” but that it was too soon to reach any conclusions. Boyajian himself held out little hope for any breakthroughs soon. Identification, he said, “could require special people and special training. It could be tough for the jeweler.” GIA research director Dr. James Shigley added that trying to pinpoint identifying features was “like chasing a ghost in the stone.”

GIA is trying indirectly to learn more about the mysterious GE process by searching for ways to change the color of diamonds itself. Shigley revealed that over the past few years GIA has learned that “the color of diamonds can be changed using heat and pressure,” but he added that “we’re not saying that’s what GE is using.”

Gem Trade Lab officials also disclosed characteristics of the GE-POL stones they had seen so far. They range from 0.30 ct. to 7 cts., with most in the 1- to 3-ct. range. Most are fancy shapes, and the clarity goes from Flawless to I2. The color range is from D to light yellow, with a majority of D to H, although some have a brownish or grayish tinge. Yonelunas added that most of the diamonds were type IIa (see p. 96).

‘Letting the industry down.’ Both GE and LKI were frequent targets of criticism throughout the symposium. Many attendees said GE should have let GIA see “before” and “after” stones and should share details of its process with GIA gemologists without requiring the institute to sign a confidentiality agreement, something GIA has refused to do. GE scientists were invited to the symposium but didn’t come.

As for LKI, symposium participants seemed both surprised and disappointed about the way the venerable firm was handling the situation. “LKI has let the industry down,” Elizabeth Chatelain, president of MVI Marketing in Beverly Hills, Calif., said at one session. “They tried to pull the wool over GIA’s eyes [by initially sending in the processed stones for grading without revealing they’d been treated], and they haven’t been helpful since then. It’s like they’re separating themselves from the rest of the industry and taking a position of them against us.”

Ironically, the symposium’s closing keynote speaker, who had been signed up months before, was none other than LKI chairman Maurice Tempelsman. Attendees expecting him to address the controversy were disappointed. In a speech about the industry’s need to accept change, he alluded only briefly to the firestorm his firm had ignited by saying that the number of GE-processed diamonds would be “very small.”

In earlier remarks, however, Boyajian warned that GE wants to “revolutionize the diamond industry.” He said the color-change process was only the beginning of a “steady stream of technological changes the company will be introducing over the next decade.”—Larry Frederick

Knowing Your Diamond Types

The GIA Gem Trade Lab says the General Electric-processed Lazare Kaplan diamonds are type IIa (see accompanying article). What does that mean? Here’s the answer.

All diamonds are made up of carbon atoms. But substitutions of carbon atoms by trace elements such as nitrogen, boron, and hydrogen can alter the physical and optical properties of the gem.

  • Type I. These, the most common ones, contain minute traces of nitrogen. Diamonds containing clusters of nitrogen atoms are classified as type Ia. These nitrogen clusters, called color centers, “pull,” or “draw,” color concentrations. They absorb the color violet, causing most diamonds to appear with a “cape” yellow tint. Diamonds with grouped nitrogen can easily be identified by their classic visible spectrum, showing the characteristic 415-nm line in a hand-held spectroscope. More unusual blue-gray and gray-violet colored diamonds, also classified as type Ia, contain trace amounts of hydrogen atoms.
    Type Ib diamonds also contain nitrogen, but only as single isolated atoms. These are much less common and often create a more fancy yellow body color. A “true canary” yellow diamond is a type Ib, as are synthetic yellow diamonds. There is no diagnostic visible spectrum.

  • Type II. These are very rare. They either have no impurities or contain traces of boron. Type IIa diamonds are the purest of all diamonds. Because of their purity, they are typically colorless, showing no visible spectrum. Pinks, browns, and blue-green diamonds also can be type IIa. The color in these stones comes not from impurities but rather from lattice displacement, natural irradiation, or both. Type IIa diamonds are usually large. The Dresden Green is a type IIa. Synthetic type IIa diamonds make excellent heat sinks for industrial use. The GE-POL diamonds are said to be type IIa, heated under pressure to realign the crystal lattice distortion.
    Type IIb diamonds are rarer still, containing trace elements of boron. Because of the substitution of the carbon atom with the smaller boron atom, electricity can pass through the atomic structure. To prove natural blue color, gemologists test for electrical conductivity. Type Ia natural blue diamonds, which contain hydrogen, do not conduct electricity.—Gary Roskin, G.G., FGA

‘An Uneasiness About the Future’

Aside from the GE-LKI controversy, the predominant theme of the symposium was change—and how this sometimes-tradition-bound industry is and is not coping with it. While both the opening and closing speakers—businessman Peter Ueberroth, president of the 1984 Los Angeles Olympic Organizing Committee, and LKI’s Tempelsman—urged the attendees to embrace change, many participants seemed wary about what was coming. From treatments to branding to the Internet, there are more things to worry about than ever. As Boyajian acknowledged in his closing remarks, “There’s an uneasiness in the industry about the future.”

Despite all this, the mood of diamond industry attendees, at least, was strikingly upbeat, especially when compared to the somber mood at last summer’s “Israeli Rough Conference” in Tel Aviv. The U.S. economy remains strong, the Far East is showing signs of vitality, and there is even some slight resurgence in profitability throughout the diamond pipeline. (More than slight at De Beers; see p. 50.) At the Tel Aviv conference, a representative of diamond bank ABN-AMRO had to be prodded into saying he sees a good future for the industry. At San Diego, when another ABN-AMRO representative pronounced himself “optimistic,” no one doubted that he meant it.

De Beers was an ongoing subject of speculation. Part of this was fed by the attendance of two employees of Bain and Co., the consulting firm that’s doing De Beers’ widely watched “strategic review.” The consultants were tight-lipped, but that didn’t keep attendees from asking each other where the review would lead and whether De Beers will decide it’s no longer feasible to maintain the cartel structure.

Nicky Oppenheimer, chairman of De Beers, fueled the fire by mentioning the review in his videotaped “welcome message.” He noted that, no matter what the review’s conclusions, De Beers will remain committed to “the stability of the diamond market”—a goal that struck some participants as vague, especially since it made no mention of maintaining single-channel marketing.

Also raising eyebrows was a U.S. State Department employee who brought up Angolan diamonds during one of the seminars. The question of whether Angolan diamonds are funding the country’s civil war has become embarrassing for the industry. The Economist, an influential newsmagazine, recently ran a piece about “Rocks that Kill.” Also rumored to be in attendance were representatives from Global Witness, the human rights group that criticized De Beers’ role in the conflict.—Rob Bates

Sophisticated Equipment: The Future Is Now

If you work in one of the big gem labs, there’s good news: Even as gemstone treatments and the production of synthetics both grow more sophisticated, so too does the identification equipment available to you. If you’re a jeweler running a typical store, though, this news carries a downside: You can’t afford the equipment yourself, and even if you could, you’d need lots of training to use it. Already there’s infrared, X-ray fluorescence, and Raman spectroscopy. Coming are things like laser ablation—or, more precisely, inductively coupled plasma-mass spectrometry.

At the symposium, GIA research lab director Shigley noted that advanced instrumentation comes into play even with relatively simple identifications. Take synthetic moissanite. While many believe identification is easy, owing to moissanite’s strong double refraction, others depend on electronic testing devices. “There are a number of useful testers,” he said. One fairly reliable device, developed by synthetic moissanite supplier C3, detects identifying features in the visible spectrum. Other testers examine moissanite’s electrical conductivity. These new instruments are more sensitive and therefore more accurate than those developed just a few years ago, said Shigley.

Shigley reminded jewelers that synthetic diamonds remain pervasive in the jewelry market. Yellow synthetics are still the most common, but there are also limited quantities of near-colorless, blue, pink, and a host of other colors. Most yellow synthetics contain an unusual hourglass-type graining and will fluoresce under UV (stronger under short wave) in a cross-type pattern. Near-colorless synthetic diamonds don’t have the same properties as the yellows, but they do have identifying phosphorescence, an afterglow response to UV. That’s an easy way to cull synthetics from a parcel of natural diamonds. Even so, Indian diamond manufacturers who use thousands of carats of melee fear they’ll have to test each stone individually to look for “salting” of natural parcels with synthetics.

Ken Scarratt, director of the American Gem Trade Association’s gem identification laboratory in New York, said high-tech equipment likewise aids in determining a gem’s country of origin, which in turn helps identify what treatments might have been used. Consider heat-treated sapphires. They can come from Laos, Cambodia, Sri Lanka, Thailand, Burma, Vietnam, Montana, Tanzania, Australia, or Madagascar. Almost all sapphires are heated to high temperatures, leaving telltale signs visible under magnification. Knowing that a sapphire, especially pink sapphire, is from Madagascar, for example, can be helpful, since these stones require minimal heat to enhance their color, and the heat leaves no internal visual identification features. In order to prove heat treatment of a Madagascar stone, you need to use Raman spectroscopy, examining zircon crystals that are affected by the lower heat.

Scarratt also pointed out that the identification of glass-filled cavities in ruby is no longer an easy visual task, a matter of simply noting the luster difference between glass and ruby. “You must identify whether or not you have cut through an inclusion,” says Scarratt. This, again, takes sophisticated Raman spectroscopy.

Immersion microscopy can help identify synthetic hydrothermal emerald from China, according to Dr. Karl Schmetzer of Petershausen, Germany. The angle between the axis of the newly grown synthetic crystal and the seed crystal used to generate the synthetic growth is 30 degrees. Immersion microscopy, which is not yet commonly used in the United States, helps to visually identify the growth angle.

Amid all the talk of using high-tech equipment to identify gemstone enhancement, Dr. John Emmett, founder of JLE Associates and Crystal Chemistry in Brush Prairie, Wash., described his own down-home approach to defining enhancements. Emmett’s system includes three categories: “natural,” “messed-around-with,” and “synthetic.”

Cutting remarks over diamond parameters. A debate over diamond proportions began with a tribute to GIA’s Dr. Ilene Reinitz, touted as the next Tolkowsky, for her research to determine the best measurements for a faceted round brilliant. The panelists then got down to arguing over ideal table size, crown angle, and pavilion depth.

Some participants questioned whether, in light of new technology, the question ultimately is moot. Sitting quietly in the audience was Randy Wagner of Lambda Spec, creator of spectrophotometers that measure brilliance and dispersion. Panelist Al Gilbertson, an appraiser from Portland, Ore., said that he and others are already using spectrophotometers for that very purpose—so who needs computer models to determine the angles and percentages? Richard von Sternberg, another panel member and owner of Eight Star Diamond Cutters, also sat fairly quietly, knowing that these measuring devices prove that his symmetrically cut diamonds can acquire high brilliance and dispersion ratings with or without the standard Tolkowsky measurements.

Meanwhile, the romanticists had their say. A few panelists, including distinguished diamond merchant William Goldberg, trotted out the old bromide that beauty is in the eye of the beholder.

Where have all the gemstones gone? Experts on colored gem global resources ran through an enormous list of current gemstone-producing localities. Unlike diamond, with vast reserves typically found in one location, colored gems come from many small, independent sources. And there are no guarantees that a gem deposit will maintain production for any length of time.

Examples abound of mines that are tapped-out or nearly depleted. The recent Nigerian tourmaline find has already been completely mined out, reminiscent of the alexandrite deposit in Itabira, Brazil. Paraíba tourmaline is still being mined, although the yield is limited. Concern over declining Colombian emerald production has many considering buying large stocks or looking to new sources such as Zambia and Afghanistan. The Russian demantoid deposits are uncertain, from both a geologic and a political standpoint. Burma rubies, Kashmir sapphires, Bolivian ametrine, and even Japanese cultured pearls may or may not be available in the future.

The panel’s final consensus: If it’s pretty, and you like it, better buy it while you can.—Gary Roskin, G.G., FGA

Moscow Attendees Optimistic About Detecting LKI Process

While the Gemological Institute of America is downbeat about finding an easy detection technique for the Pegasus “process,” De Beers managing director Gary Ralfe was surprisingly optimistic at the recent meeting of diamond industry associations in Moscow.

Like GIA, De Beers has done private work on color treatments, Ralfe said. “A long time ago, we discovered that type IIa diamonds, with negligible or no nitrogen, could indeed be enhanced with what at that time left no signs for future detection.” Because of this, De Beers removed brown type IIa diamonds from circulation. “Those diamonds have been set aside, and we’ve built up a stock over the last 20 years. That stock will, I hope, remain forever buried in our vaults.” He said that while only 1% of the world’s diamonds are type IIa, type IIa diamonds are more commonly found in rough stones over 10 carats (the so-called specials).

But Ralfe indicated there could be a breakthrough ahead: “[Among De Beers scientists] there’s optimism that certain characteristics of those diamonds will give clues about how to discriminate an annealed type IIa diamond after the event.”

Gemologists think that most of the diamonds General Electric is “processing” are type IIa, since most of the Pegasus stones are fancies. Type IIa rough is often unusually shaped, which is why it would be cut into fancy-shaped stones.

At San Diego, GIA officials noted that while the Pegasus stones were mostly type IIa, there were some type I stones as well. But in Moscow Ralfe’s news was even better: “[Regarding] type I diamonds, into which the vast majority of rough diamonds fall, our scientists say that it’s very easy to detect any annealing,” he said.

Ralfe also surprised some by repeatedly referring to the GE process as “annealing,” an often-used term for a heat treatment. Lazare Kaplan International and GE have never formally acknowledged that the mystery “process” involves heat, though most experts think it does.

Following Ralfe’s speech in Moscow, LKI president Leon Tempelsman answered nearly two hours of not-always-friendly questions from diamond industry people wary of the process. Tempelsman, who most thought handled a difficult situation well, argued that, like it or not, the new process is here to stay. “I’m concerned about the same issues concerning you,” he said. “But being concerned doesn’t make [the process] go away.”

“One option was for General Electric to simply make the process available and do it for a fee,” he added. “I don’t think that’s in the trade’s interest.”

While Tempelsman said he was in favor of full disclosure and aiding GIA’s research, he disagreed with one dealer’s suggestion that LKI hold the process off the market until a detection technique is discovered. “There’s a limit to the commercial pain we can endure,” he said. And, despite De Beers’ optimism, he maintained that “there is a certain percentage of these stones that will always be undetectable.”

He added that GE has warranted that the process is “permanent” and “irreversible” and that LKI has not put any un-inscribed stones into circulation. And he announced that LKI was thinking of setting up an entity that would sell the stones directly to U.S. retailers.

GIA president William Boyajian faced questions from Moscow attendees as to why GIA’s Gem Trade Lab was grading the stones, since the lab as a rule does not grade treatments. Boyajian argued grading the stones was “a reasonable compromise” that ultimately will benefit the trade. “The more goods we see, the more we can test, the more we can characterize them gemologically,” he said.

After further discussion about Pegasus, the World Federation of Diamond Bourses passed new bylaws that stipulate that “if a diamond has been treated or processed in order to enhance its color, other than by generally accepted procedures of cutting and polishing, this fact must be disclosed in writing when such a diamond is offered for sale or submitted for certification.”

Another bylaw added that “removing a lasered inscription that identifies a diamond as having been treated or processed as above shall be considered a deceptive practice.”

The International Diamond Manufacturers Association also passed a resolution saying that “all diamond treatments/processes must be disclosed if the treatment/process has an effect upon the diamond’s value.”—Rob Bates

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